Bayer HealthCare to Shutter Kansas Plant, 130 Jobs Terminated
April 23, 2015
By Mark Terry, BioSpace.com Breaking News Staff
Bayer HealthCare announced Tuesday that it will close its manufacturing facility in St. Joseph, Kan., laying off about 130 people.
The company acquired the facilities in 2013 when it bought the U.S.-based animal health component of Israel-based Teva Pharmaceutical Industries. Bayer acquired the business for approximately $145 million, which included the St. Joseph factory. The animal health business included anti-infective drugs for animals, such as livestock, and nutritional and medicinal products for pets.
Included in the Teva deal were manufacturing operations, a fluids facility, a research and development center and a distribution center. As part of the closing, everything except the distribution center will be shuttered.
In January Bayer HealthCare announced that it would invest approximately $6.5 million into the St. Joseph manufacturing operations. The St. Joseph Economic Development Partnership pulled together a laundry list of local and state incentives to keep the company in the area.
“It was of the utmost importance for these jobs to be secured,” said R. Patt Lilly, president and chief executive officer of the St. Joseph Chamber of Commerce in a statement in January. “The threat was very real that Bayer may have left the community. We are very happy that we were able to help negotiate a deal to keep these workers employed and to keep this stake in the Animal Health Corridor in St. Joseph.”
However, Bayer chose not to pursue those incentives, which required the company to keep 120 to 125 jobs with average salaries of $59,000 and benefits.
“We offered good support for the company,” said R. Patt Lilly in a statement. “They were hopeful initially that their products might grow in a way that would allow for additional manufacturing here, but apparently that did not work out.”
Bayer indicated that even with the incentives, the market was such that the manufacturing facility had excess capacity. Two products manufactured there, the DVM and Expert Care brands, will be moved to other locations. Some of the other products will be discontinued.
In a statement, the company said the closure was not related to “performance of the employees at the site, who consistently showed dedication to their work by producing high-quality animal health products.”
There has been a lot of movement in the animal health products arena this year, most notably Indianapolis-based Eli Lilly and Company's acquisition of Novartis Animal Health. Under that deal, which closed Jan. 1, 2015, Lilly bought Novartis Animal Health for about $5.4 billion in cash.
That deal also resulted in lost jobs, with Lilly announcing the close of its Terre Haute animal enzyme manufacturing facility by early 2016, laying off 23 people.
Swiss-based Novartis announced on Jan. 19, 2015 that it was closing a manufacturing plant in Puerto Rico by 2019 and would lay off 270 people. Some of those jobs will be transferred to other companies, including Eli Lilly, while others would go to Novartis’s facility in Lincoln, Neb.
The Puerto Rico facility produces and packages animal health products, Sentinel, Interceptor and Milbemax, as well as Gas-X and Ex-Lax, and the packaging of Prevacid.
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